Operations

Chrysler Boss Predicts Sales Rise Ahead

January 8, 2004

Chrysler Group CEO Dieter Zetsche has told financial analysts he is confident DaimlerChrysler’s United States division will see a rise in model sales this year, thanks to a new crop of vehicles led by the 300C, its first rear-wheel-drive sedan in years, a Wall Street Journal (WSJ)/Dow Jones report said.
"Now we are there where we want to be," Zetsche reportedly said during in a presentation to automotive industry analysts at the North American International Auto Show in Detroit. "I'm finally satisfied. I wasn't ever before. That's the kind of satisfaction I was dreaming of."
The WSJ noted that the 300C has enjoyed positive reviews at the Detroit show, including some kudos from rival car company executives -- the car replaces the front-drive 300M in the Chrysler range. Zetsche reportedly said the V8 model, which will offer an engine with the heavily promoted Hemi name also used in Dodge trucks, will be priced under $34,000 with the base model starting below $24,000.
However, the Wall Street Journal noted, some dealers have described rear-wheel drive as a potential drawback for the vehicle, saying potential buyers might rule it out because rear wheel drive cars don't perform as well as front-drive models in mountainous and snowy states.
During his presentation to analysts, Zetsche blamed the 4 percent drop in Chrysler sales in 2003 on a lack of new products and a poorly executed launch of an important new vehicle, the Pacifica "crossover," the WSJ said.
"We somewhat underestimated the reality of slow flow of product from the pipeline," Zetsche reportedly said.
The WSJ said Chrysler this year will launch the 300C and eight other new vehicles, including the Dodge Magnum, a brawny station wagon and a redesigned Jeep Grand Cherokee. New competitively priced versions of its minivans feature two rows of seats that fold flat into the floor, an industry first, the report noted, adding that Zetsche declined to give financial details about the fourth quarter or profit forecasts for Chrysler next year, except to say the company expects increases in sales and market share.
The WSJ noted that Chrysler reported a $1 billion loss in the second quarter last year, because of escalating incentives and a crushing product-led push by Japanese manufacturers and added that Zetsche called the loss a clear setback for the Chrysler turnaround plan, which began in 2000 when he and his second-in-command Wolfgang Bernhard arrived at the carmaker to replace sacked or resigned U.S. executives.
The WSJ said Zetsche told analysts Chrysler has, in the past three year, slashed employment levels by a fifth to 102,000 workers, mostly by selling several parts factories, and has also improved plant efficiency and driven down fixed costs by 25 percent to pre-1996 levels.
According to the Wall Street Journal, the 300C impressed Kenneth Gilman, the president and CEO of Asbury Automotive Group, a large retailer with multiple, multi-brand dealerships. Gilman reportedly said he liked the "emotional" design of the 300C, its price positioning and Chrysler's improving quality.

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